IMPORTANT POINTS:
- Berkshire Hathaway, Warren Buffett’s conglomerate, took advantage of the market turmoil and expanded its stakes in Apple, Chevron and Occidental.
- For years, the Oracle of Omaha has complained about high stock valuations, an argument that made it buy few shares compared to other periods.
- Buffett also bought the Alleghany Corporation company for more than 11,000 million dollars, which focuses on the insurance business.
- During the first quarter, Buffett bought $600 million worth of Apple stock and now owns $159.1 billion in the company, ranking No. 1 in Berkshire Hathaway’s portfolio at 40%.
For many years Warren Buffett has been complaining about high stock valuations, prompting his conglomerate, Berkshire Hathaway, to slow down on asset purchases.
However, it seems that the Oracle of Omaha bet big on the stock market again and, during the first quarter of 2022, bought $41 billion worth of stock, the highest figure since 2008.
It is clear that Buffett took advantage of the great fall that companies are suffering due to the difficult world context. The Nasdaq, the index that groups top-tier technology companies, had its worst month in 14 years in April and so far in 2022 has recorded a loss of more than 21%.
During the first three months of the year, Buffett expanded his holdings in Occidental Petroleum, Chevron and Apple. In addition, he purchased the Alleghany insurance company for $11.6 billion in cash, though the deal hasn’t gone through yet.
According to Edward Jones analyst Jim Shanahan, the nonagenarian investor spent nearly $40 billion in the oil sector this year, with purchases of Chevron and Occidental.
With these purchases, Berkshire ended the quarter with $106 billion in cash, the lowest level since the third quarter of 2018. While it also slowed its share buyback to 3.2 billion, compared to 6.9 billion bought back in 2021.
In a highly turbulent market, Berkshire’s Class A shares soared, gaining more than 17% in the first quarter.
Apple, Buffett’s star
One of the most well-known phrases by the investor is that “you have to be greedy when others are fearful and fearful when others have their eyes injected with greed”. And Buffett fulfills it to the letter.
It is that while there was a wave of sales in the technological sector, which included the big tech, Oracle bought the fall of Apple, his favorite company.
According to data they showed, Berkshire Hathaway acquired 600 million dollars in Apple securities, totaling shares of 159.1 billion dollars, which makes the company the apple the largest share, with more than 40%.
“Unfortunately, the stock went back up, so I stopped. Otherwise, who knows how much we would have bought?
Buffett at the shareholders meeting.
Buffett has been buying Apple stock for six years and there is a reason for that beyond its strength as a company: “Tim Cook, the brilliant CEO of Apple, considers the users of Apple products his first love, but all of his other constituents also benefit from Tim’s managerial touch,” the investor said.
The conglomerate has also enjoyed regular dividends from the tech giant over the years, averaging around $775 million annually.
